An extremist, not a fanatic

May 09, 2015

"Aspiration"

Alan Johnson's lament that Labour is no longer "a party of aspiration" confirms my view that Blairism is not so much wrong as just out-of-date.

What I mean is that, back in the 90s, it was easy to be a party of aspiration. The IT revolution was promising a bright new future, so talk of aspiration, modernity and newness chimed with the zeitgeist. And the world economy was growing well and a favourable supply shock - a falling China price - was boosting real incomes. A government could thus deliver rising living standards simply by not screwing things up too much.

But now is not then. Labour productivity has been flatlining for years and the intelligent talk today is of secular stagnation, not of a new economy. This changes everything. In a world of zero productivity growth, people's real incomes can rise only in one of three ways: by moving from unemployment to work (which whilst a good thing is not what Mr Johnson means); or by getting a lucky supply shock such as falling commodity prices, which might not happen; or if one person's income rises at the expense of another's.

When productivity is flat, "aspiration" is a zero sum game.

This means that if Labour is to be a party of aspiration, it must do one or both of two things. Either it must shift incomes from profits to wages, say by embracing wage-led growth - which not Blairite and might not work. Or it must offer policies to raise productivity.

Now, there are many possible ways of doing the latter - albeit of perhaps dubious efficacy. But there's one worth emphasizing - greater worker ownership and control. There's goodevidence (pdf) that this (pdf) can raise productivity, perhaps because it motivates people to work better, or perhaps because it makes better use of fragmentary, dispersed knowledge than central planners can.

This is why I say Blairism is irrelevant today. Back in the 90s, it was possible to be both a party of aspiration and a party of managerialism with its anti-egalitarian and pro-1% guff about "leadership". Today, this might not be possible, because the best hope for raising productivity and hence real wages lies in replacing managerialism with worker democracy."Aspiration" and radicalism might therefore be far more compatible than Blarities think.

Efficiency is a game of countless variables, one firm may look efficient at a micro level but may actually contribute to huge waste when looked at via the macro level.

What this article claims is that worker owned businesses raise productivity. The basis of this argument is that workers with agreater say in the business are more motivated and that worker owned businesses have more incentives to introduce labour saving technology than capitalist ones, who will only do so if it makes more profit than employing workers.

Of course there is always a subjective element to this, for the shareholder of an energy company the CEO who delivers huge profits is a genius and a hero, an overman for whom we are all not worthy, but for the ripped off customer he is a cheating, robbing spiv who should be put in the stocks.

Ultimately you have to nail your colours to the mast.

I suspect Matt Moore would be happiest on his knees before the overman.

I think you can interpret Johnson's use of the word "aspiration" in two ways. The generous interpretation is that it is a synonym for hope: a better tomorrow, opportunity for all etc. The less generous interpretation is that it is code for business/rich-friendly.

The comment by Ben Bradshaw, that Labour needs to "celebrate our entrepreneurs and wealth creators and not leave the impression they are part of the problem", would suggest the latter interpretation is the more likely. Like the Bourbons, the Blairites seem to have learnt nothing.

'Aspiration' in Blairite terms undoubtedly refers to 'getting on', in terms of income and status. It is almost always defined in individual terms, and usually involves not only 'getting on' but 'getting ahead'. This has been the core of Tory policies for years, and has won success for them for the reasons Chris has outlined- in a stagnant economy individual aspiration can only be at the expense of someone else, so food banks are just a price we have to pay for other people's sports cars and conservatories.

Of course, societies can always aspire to collective goals, but this argument would go way over the head of any Blairite.

Oh please enough with pious imbecility of euphemisms for "aspiration". It is not at all about businesses or even higher wages.

As several policitians have let slip "aspiration" in the UK means "bigger better house prices for those who have bought properties in the South East in the 1980s to the 1990s", and lower wages and welfare, and higher rents and less security for everybody poorer than them.

It is just craven hypochrisy to argue as if it meant anything less baser and more meaningful than that.

"What I mean is that, back in the 90s, it was easy to be a party of aspiration."

It's easy now. What parties say and what they do when in power are entirely separate. It's about creating a story that the electorate believe. The Tories have created a story about the deficit and "maxing out our credit card" that people believe. That's enough to win power. Even though it is bollocks. I think that's what Johnson is alluding to: create a bullshit narrative that people believe and will vote for.

The problem in england and wales seems to be that the Tory party is much better at selling bullshit than the others.

I am impressed with Blissex and the story that the south of england property speculation mentality is fundamental to the success of the Tory appeal. An ideology that says I am "middle class" and deserve to be able to have a perpetual tax free capital gain from land is a key element of the right wing bias in party politics. It also is only possible as the state has contrived to create it by restricting housing supply while boosting demand in a way that defies any "free market" concept and thus depresses UK productivity while reducing real incomes for millions of people. The creation of a monopoly system for the Middle Class and the idea everyone should want to get on the gravy train with them, is a block on social progress and I am attracted to the view that the lack of this ideology in Scotland explains the divergence in voting between Scotland and the rest in the last General election. Outside of the the home counties and London the conditions are different. I wonder how you can square this ideology with any real social progress or with policies to boost productivity? The promise of ever higher land prices seems detrimental to both. As it rewards passive investment in immovable goods and misallocates the nations economic assets while inviting credit booms and periodic financial problems in the banking sector.

«The promise of ever higher land prices seems detrimental to both. As it rewards passive investment in immovable goods and misallocates the nations economic assets»

Also the "beauty" of that is that it is purely redistributive and upwards redistributive too: all the gains to property owners from higher property prices necessarily are someone else's loss, someone who is poorer (at least in land).

At the same time as it rewards richer rentiers it punishes poorer workers (and businesses, but they are ambivalent about it).

The typical case that I have seen many times is people from the North moving to the South: yes, there are more jobs in the South, thanks to extraordinary government subsidies to London and other "core" tory areas, including colossal subsidies to house speculation that then boost incomes and jobs in the financial and building trades in the South.

People moving from the North to the South do get some of the government supported jobs in the South, but then promptly leave a large chunk of their new found wage in much higher rents or house prices to the tory voters of those areas.

Sometimes I wonder which came first: the desire of the financial sector to have an ever increasing market for debt and speculation, or the desire of the South East middle classes for much higher rents and tax-free capital gains.

From historical reports I reckon neither: it was the intense desire of the Thatcher government (not Thatcher herself apparently) to create a debt-based consumption boom (to counter the enduring depression of the industrial economy) which was embodied at first in the abolition of the "corset" and demutualisation of building societies (as David Boyle notes in "Broke") and later much more (e.g. PFI), in order to pursue "private Keynesianism" (as Colin Crouch has noted), which is just government-sponsored borrow-and-spend.

«The Tories have created a story about the deficit and "maxing out our credit card" that people believe.»

That's not the Tory story, or at least it is a minor part of their story.

The biggest part of the Tory story is exactly the opposite: they tell voters that they will become rich only by maxing out the credit card to borrow a lot of debt for highly leveraged property speculation, and that a Tory government will lend (or even handout cash) to them whatever it takes to satisfy that "aspiration" for lots of debt and the resulting tax-free capital gains.

Note that this story applies *only* to voters in the South East.

The minor story is that the same voters in the South East are tired of their precious capital gains being wasted in rather small part on the unemployed and disabled people in the North, and they want that part of the deficit and the national "maxed-out credit card" to be cut.

Look at all the policy announcements the Tories have made: the big ones have always been about bigger cheaper government sponsored loans/handouts to South East property speculators.

Usual quote from George Osborne that carries both stories:

«A credible fiscal plan allows you to have a looser monetary policy than would otherwise be the case. My approach is to be fiscally conservative but monetarily active.»

Blissex, how would you explain why the Tories get so much support outside the asset-rich South East? (Especially in somewhere like Hexham or North Yorkshire, from which no-one could practically commute to London...)

North Yorkshire certainly isn't like the South East in the most obvious respect (you'd find it extremely difficult live to live there and work in London, unless you were so super-rich you could commute by helicopter!)

Are you saying that the economy there (and in other rural areas outside the London commuter belt) lives not off agriculture, tourism or the normally-cited "main industries" there, but rather off MEWing fuelled by property price inflation driven by rich Southerners wanting second homes there?

«why the Tories get so much support outside the asset-rich South East? (Especially in somewhere like Hexham or North Yorkshire»

The Tories are actually two or three different parties, in geological layers, one of them is the auld tory farm squires (and not so squires) party: the rural bits of the North vote Tory out of tradition, because of time immemorial, just like some bits of the celtic fringes still vote Liberal (certainly not libdem) out of immemorial tribal habit. Just like in auld times the local populace would vote for whichever tory nominated by the local lord of the manor.

That's mostly men BTW, who are widely reckoned by political strategists to vote their "tribal identity". With the exception of the "mondeo man" met by Tonty Blair :-).

«the economy there (and in other rural areas outside the London commuter belt) lives not off agriculture, tourism or the normally-cited "main industries" there, but rather off MEWing fuelled by property price inflation»

Did you know that english farm land has trebled in price in 10 years as large amounts of international capital fueled by massively leveraged borrowings have taken speculative but long term positions in farm land worldwide? And that farm produce prices worldwide have been booming? And that the pound at one point fell by 25% against trading partners?

«driven by rich Southerners wanting second homes there?»

There are picturesque market towns of the North that have certainly "benefited" a lot from being gentrified by affluent Southern pensioners living off rent from their South East properties.

"(and businesses, but they are ambivalent about it)."
Blissex - depends if the business is tenant or owner occupied. Owner occupied has an advantage and many shops would make more money renting to a more efficient firm.
Plus, large firms (e.g Tesco) come in and get offered lower rents so others move in. This agglomeration? (is that the word) increases the Tesco's value and in a couple of years landlord increases rents and pockets the lot.
Which is why many high streets are failing as firms would not clear space for e.g. car parking as owned by many small landowners.
Of course the best solution is state owns land/land value tax.

"You mean all that talk about Britain's farmers being squeezed virtually to death by the greedy supermarkets is just propaganda then?"
Farm subsidy may increase price demanded as they can survive on the subsidy to an extent.